Tax cut news push Sensex, Nifty higher

Our Bureau Mumbai | Updated on October 29, 2019

However, telecom stocks such as Airtel took a beating on SC’s deadline on fee payment

India’s stock market on Tuesday witnessed a sharp rally on the back of news reports that the Centre was likely to withdraw long-term capital gains tax (LTCG) and also do away with dividend distribution tax. Markets traders are further looking at the US Federal Reserve’s decision on interest rate cut, and domestic corporate earnings will be major triggers. Sensex gained 582 points or 1.48 per cent at 39,831. The Nifty index rose 159 points or 1.37 per cent to close at 11,786. Nifty crossed its crucial resistance level at 11,750.

FPIs bought shares worth ₹877 crore while domestic institutional investors were net buyers of shares worth ₹145 crore.

One of the leading Hindi news channel reported on Tuesday that PMO was reviewing the tax structure in equity markets and the Department of Economic Affairs as well as Revenue held meetings with the PMO on the issue. LTCG of 10 per cent was imposed in 2018 Budget by former finance minister Arun Jaitely, which hit market sentiments badly. Reports suggests the government has not been able to earn much of revenues due to the tax and hence a review is underway.

Telecom shares including Bharti Airtel and Vodafone Idea took a beating after the Supreme Court order last week set a three month deadline for payment of pending licence fee and spectrum due to the government by the telcos. The two telcos together owe around ₹1-lakh crore to the government.

Share price of Bharti Airtel fell by 3.3 per cent at ₹360 and Vodafone Idea were down by 7.14 per cent. Reliance Industries gained 2.8 per cent after it announced a structuring of debt and demerger of business.

The Union Government’s recent tax cut benefits will be seen in the forthcoming financial results of most companies, experts said.

Share price of Tata Motors posted their biggest ever two-day gain after the company recorded robust quarterly results. Tata Motors gained 16.55 per cent at ₹172.

Published on October 29, 2019

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